OC Oerlikon (OERL) Q4 2024 earnings summary

Executive summary

• Management transition underway, with a new COO joining and board refreshment to prepare for the next decade; generational change in leadership announced.

• Finalized decade-long portfolio transformation, focusing on two divisions: Surface Solutions and Polymer Processing Solutions, both positioned as market leaders in niche segments.

• Initiated and completed preparations for the separation of Barmag (Manmade Fibers), creating two distinct investment opportunities and enhancing agility.

• Continued innovation leadership with successful launches such as ALCRONA EVO and next-gen equipment, supporting resilience and growth.

• Sustainability remains a core focus, with over 80% of R&D directed at sustainable products and top 20% ESG ranking in the industrial sector.

Financial highlights

• 2024 group sales were CHF 2.4 billion, down 9.1% at constant FX; operational EBITDA was CHF 393 million with a 16.6% margin, up 10 bps year-over-year.

• Surface Solutions sales stable at CHF 1.5 billion; operational EBITDA up 3% to CHF 270 million, margin expanded by 90 bps to 18.0%.

• Polymer Processing Solutions sales CHF 875 million, down 23% at constant FX; operational EBITDA CHF 112 million, margin 12.8%.

• Operating free cash flow improved to CHF 162 million, supported by improved working capital and non-recurrence of prior year tax effects.

• Net debt/EBITDA at 2.8x, with CHF 920 million cash and CHF 150 million bond repaid in 2024.

Outlook and guidance

• 2025 group sales expected to be stable or grow low single-digit % at constant FX; operational EBITDA margin guided at ~15.5%.

• Surface Solutions: organic sales flat or low single-digit growth, EBITDA margin 18.5%-19%.

• Polymer Processing Solutions/Barmag: sales flat or low single-digit growth, EBITDA margin ~7.5%-10.3% due to 2024 price concessions; margin recovery expected beyond 2025.

• Management confident the trough in Polymer Processing Solutions was reached in 2024, with order intake and customer activity improving.

• Capex planned at CHF ~130 million for 2025.